Ever since they challenged Chiel Industries bid for Samsung C&T, New York-based activist hedge fund Elliott Associates has been a pebble in the shoe for Samsung’s founding Lee family. Well, that pebble just grew a little sharper, according to Bloomberg.
After basically crushing the Lee’s play for a smooth takeover of Samsung C&T through their holding company Chiel Industries, Elliott has taken the fight to the construction and trading company’s other shareholders, namely, the National Pension Service and Samsung SDI, the first and second largest investors of the company respectively. Elliot is currently Samsung C&T’s third biggest shareholder,
Both firms have confirmed that they have received a letter from Elliott, which Bloomberg reports as essentially saying:
Cheil’s offer for Samsung C&T provides an unfair stock ratio and should be opposed, Elliott said in the letter, according to an e-mailed statement from Samsung SDI.
For the Lee’s, the acquisition of Samsung C&T is important. The family patriarch and Samsung Electronics chairman, Lee Kun Hee, has been incapacitated for over a year now, and Lee Jae Yong, the heir-apparent, has to consolidate the tangled web of holdings his family has to secure his own ascension to power.
With Samsung C&T owning over 4% of the group’s crown jewel, Samsung Electronics, as well as an entire mélange of shares in the group’s other companies, a slick takeover of C&T could have brought him dramatically closer to his goal – shareholders be damned.
But Elliott Associates founder Paul Elliott Singer isn’t a shareholder you could brush off easily – something the Argentine government, as well as Enron, found out several years ago.
Other than saying that they haven’t decided how they will vote on the deal, The National Pension Service has remained mum on the letters. Same with Samsung SDI.
With Singer already reaching out to them, and with the Lees presumably not far behind, they just found themselves in the middle of a really big fight, with the fate of Samsung C&T – along with the Lee’s – almost entirely in their hands.
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